BMW’s MINI division has reportedly started looking into building an even more mini MINI to compete with Smart’s ForTwo and Toyota’s iQ.

Officially code-named “Minor,” an allusion to the car’s size and heritage, the smaller MINI would slot in somewhere just above the ForTwo and would feature dimensions not unlike the original Alex Issigonis-designeed Mini. Sources within the automaker haven’t indicated whether the vehicle would be capable of seating more than two passengers and their luggage. Given modern safety standards, packaging similar to the original Mini would be out of the question.

“Nothing is decided just yet,” a MINI source told Autocar. “It is all at an early stage of conception. But there is a lot of momentum behind it right now. We may be ready to show a concept within the next 12 months or perhaps a little longer.”

Although a smaller MINI probably wouldn’t make much financial sense in North America, where the Smart ForTwo has seen only modest sales, it would serve a large market in Europe. Even then, MINI has long said that the business case for a smaller car is tough.

“The question we’ve asked ourselves all along is: How do we make money at this level?” the unnamed source said.